Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
Reuters – Hedge fund Harbinger Capital Partners said on Tuesday it had lost more than a quarter of its stake in sugar maker Tate & Lyle as it has been unable to reclaim them from collapsed bank Lehman Brothers.
Harbinger said 17.7 million shares — worth 80 million pounds ($131.4 million) at current prices — will not be recovered and further shares held by Lehman may also be lost.
Bloomberg – Former Bear Stearns Cos. hedge fund managers Ralph Cioffi and Matthew Tannin are either responsible for triggering a $1.4 billion hedge fund implosion or are scapegoats for a government eager to affix blame for it.
Jurors selected for a trial beginning tomorrow in Brooklyn, New York, federal court must decide whether the two men misled investors about the health of two hedge funds that collapsed in 2007. The debacle was followed a year later by the failure of Bear Stearns and its purchase by JPMorgan Chase & Co., the bankruptcy of Lehman Brothers Holdings Inc., the U.S. takeover of Fannie Mae and Freddie Mac and the rescue of AIG Inc.
SF Gate – Apparently, hedge funds are so toxic in Alameda that just throwing the word around is enough to qualify as in depth criticism of the Alameda Point Revitalization initiative. The question at Alameda Point is whether or not there will be money to build the projects, and it seems that Hedge Fund money is unacceptable, unlike traditional multinational investment money like Lehman Brothers.
D.E. Shaw, the financial partner involved in the Alameda Point Revitalization project, has routinely been one of the top performing hedge funds over the last tumultuous years, and hasn’t gone under, threatened bankruptcy, etc. No bailout here. So the undefined attack on the source of the money seems strange.
Bloomberg – Citadel Investment Group LLC will formally open its credit business next month as the $13.5 billion hedge fund founded by Ken Griffin expands into the market for leveraged loans and high-yield, high-risk bonds.
The new group, part of its Citadel Securities division, will be based in New York, according to Peter Santoro, head of institutional markets for the unit.
The Chicago-based firm is setting up the sales and trading platform as part of a larger push into investment banking. The move follows the loss of Lehman Brothers Holdings Inc.,Merrill Lynch & Co. and Wachovia Corp. during the financial crisis, which eliminated trading partners and debt underwriters.
Reuters – The list of investors filing billion dollar claims against Lehman Brothers illustrates the global damage caused by its collapse, with companies from the United States, Europe and Abu Dhabi making some of the largest demands.
Barclays Bank, Morgan Stanley, GLG Partners, The Abu Dhabi Investment Authority and the Reserve Primary Fund are among the companies that took the largest losses from debt and derivatives held with Lehman Brothers, according to claims.
Sydney Morning Herald – Hedge funds over bankers. If Lehman Brothers had a dollar for every time someone warned that hedge funds would bring the financial system to its knees, the bank wouldn’t have gone bust. While hedge funds took plenty of criticism, and are still facing calls or more regulation, the simple fact remains that they didn’t blow up the way many predicted.
It was the mainstream banks that caused the crisis. That will influence regulators and investors for many years. Whatever people say now, it’s the banks that will face more scrutiny, not hedge funds. The result? The lightly regulated, cash-rich hedge funds will grow in importance, while the tightly controlled, capital- constrained banks stagnate.
CNBC – A year after the fall of Lehman Brothers, Capital Gold Group, Inc. is still helping retirees and investors to diversify and protect what is left of their investment funds and retirement portfolios in tangible gold assets.
During the weekend of Sept. 13, 2008, as the two dozen most powerful bankers in the world were gathered together in an effort to save Lehman Brothers Holdings, Inc. by Treasury Secretary Henry M. Paulson Jr. and then Federal Reserve Bank of New York President Timothy F. Geithner, they were not aware of the financial tsunami that allowing Lehman to fail would create.
Seeking Alpha – The one trend market pundits seem to collectively be predicting with ease for the hedge fund industry is so-called consolidation.
Which is why a list of the 100 largest U.S. hedge funds, ranked by equity assets, buried deep in Goldman Sachs’ recently released report on the state of the hedge fund industry, caught my late summer-diverted attention.
Among a few of the highlights of the 47-page report: U.S. hedge funds now have net long exposure near levels not seen since before Lehman Brothers’ collapse; that hedge funds now own 3.7% of the financial sector’s market capitalization; that 7% of hedge funds have closed since the financial crisis set in; and that managers collectively boosted ownership in financials by 55% on a quarter-over-quarter basis to $70 billion, with Bank of America the favored stock pick.
New York (Press Release) – Citadel Solutions announced today that it has changed its name to Omnium, effective immediately. This name change reflects the continuing evolution of the state-of-the-art hedge fund administrator, which has grown significantly since it began in 2007.
“We chose the name Omnium because it signifies excellence and agility across all disciplines,” said John Buckley, President of Omnium. “We have an unrelenting spirit of problem solving that drives our ability to deliver innovative solutions. Our business has rapidly expanded as we have reacted swiftly to market trends, and provided our clients with an industry-leading platform supported by superior people, processes and technology.”
Last month, Omnium announced that it had been selected by Lehman Brothers Holdings Inc. (LBHI) to provide administration services, including the creation of an asset servicing platform. After a lengthy search, LBHI selected Omnium because it has the capabilities to service LBHI’s complex and diverse asset portfolios. The retention on an interim basis was approved on August 26th by the bankruptcy court and is subject to the negotiation and execution of definitive documentation.
About Omnium
Launched in 2007, Omnium provides world-class, technology-driven fund administration and reporting services to hedge funds and financial institutions that operate across a broad spectrum of investment strategies. With more than $25 billion in assets under administration, Omnium leverages Citadel’s best-in-class infrastructure and leading-edge technology to provide Operational Alpha(R) to its clients.
Reuters – Hedge fund Citadel Investment Group claims it is owed $470.5 million on derivatives contracts it held with Lehman Brothers, according to a claim filed in a New York bankruptcy court last week.
Citadel, which manages around $12 billion in assets, claims it is owed the money in its Citadel Equity Fund. The filing said the claim was at least partly based on a guarantee, but did not give details.
Bloomberg – Edward Filippi, previously with Lehman Brothers Holdings Inc., raised $35 million for a hedge fund investing in energy, metals and agricultural derivatives.
The Ground Zero Strategic Commodities Fund may begin trading in the first quarter of next year, according to Filippi, who spent a year selling commodity investment products for Lehman. The fund wants to hire a portfolio manager and an operations officer.
BusinessWeek – The collapse of Lehman Brothers on Sept. 15, 2008, and the ensuing stock market crash forced Bob Olstein, who has been analyzing companies’ financial statements and managing money for 41 years, to change the way he evaluates and invests in stocks. Now, his new rules and focus on "quality" companies have enabled his fund, Olstein All Cap Value, to sail ahead of the market’s swift recovery.
